Has Bitcoin Battered Gold?

Gold crumples again overnight as Bitcoin futures start trading, setting the scene for lower levels.

I suspect it is no coincidence that the day that Bitcoin futures officially started trading, gold prices dropped in an otherwise sideways overnight session in most markets. The Commitment of Traders Report showed a substantial drop in speculative long positioning which should be no surprise once 1260.00 broke as spoken about ad nauseam in this column. There has been much talk of a rotation out of gold and into bitcoin (but no concrete evidence), and where there is smoke, there is fire. Even if that fire ends up being the “rotating” money eventually being burnt to ash.

Gold fell from 1247.80 to close at 1242.00 overnight, rallying and failing at resistance along the way. This morning it has eked out a small rally to 1244.50 on physical buying and profit taking, but the price action remains unconvincing.

Gold has resistance at 1252.50 which held yesterday’s recovery attempt. It is followed by the break-out at 1260.00. Support is at the overnight low at 1240.70 with the charts again opening up a chasm to the 1205.00 regions after that.

Gold Daily

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Jeffrey Halley

Jeffrey Halley

Senior Currency Analyst
Based in Singapore, Jeffrey has over 25 years experience in the financial markets, having traded currencies, options, precious metals and futures. Jeffrey started his career at Barclays Bank in New Zealand. However he has spent most of it in London and Asia.Jeffrey focuses on the Asia time zone across asset classes. A regular commentator on business news TV and Radio, he is originally from New Zealand and holds an MBA from Cass Business School, London.